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The only thing Back’s £1.8bn “transformation plan” succeeded in transforming was relations with the unions, and not for the better. He infuriated the Communication Workers Union, first by trying to force through changes to pay and working conditions while commuting from his luxury Swiss apartment, then refusing to jet into Britain at all when the pandemic struck.
Williams has broken the deadlock with an inflation-busting pay deal that even the CWU, a notoriously tough nut to crack, hailed as “excellent”. It helps too that the union has turned its guns on BT with threat of a first national strike in more than three decades in a row over planned job cuts and site closures.
It’s pick and shovel work but it has paved the way for Williams to implement some swift reforms including the development of a 24/7 operation for parcels, and the rollout of new technology and automation.
It’s also become apparent that the underlying opportunity for Royal Mail is huge. Amid an explosion in online shopping during the pandemic, parcel deliveries are booming at home and abroad, and a decline in letter volumes has been less precipitous than feared. As the logistics for the new economy are created, there is the potential to become an exciting high-growth company.
Amazon, UPS, Hermes, or DHL scoff at the suggestion that a plodding corporate dinosaur could win the delivery wars but none are capable of building a network that encompasses every door in the country. Royal Mail’s decision to start Sunday deliveries, as well as collections for returns, is a decisive moment in the battle.
There are caveats – the pandemic boom could fizzle out, further skirmishes with the CWU can’t be ruled out, and service remains unreliable – but the resurgence at Royal Mail is shaping up to be one of the most astonishing of recent times.
It was only in 2019, that Vince Cable boasted that as business secretary he did the right thing by landing Royal Mail’s problems on shareholders rather than the taxpayer. Once again, it looks like he missed the point.
